---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington D.C.
20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number: 000-28837

NEW JERSEY MINING
COMPANY(Exact name of registrant as specified in its
charter)

|Idaho                             | 82-0490295                          
|--------------------------------- | ------------------------------------
|(State or other jurisdiction      | (I.R.S. employer identification No.)
|of incorporation or organization) |                                     

89 Appleberg Road, Kellogg, Idaho
83837(Address of principal executive offices) (zip code)

(208) 783-3331Registrants telephone number,
including area code

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(D) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period as the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days.Yes [X] No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer, accelerated
filer and small reporting company in Rule 12b-2 of the Exchange Act.

|Large Accelerated Filer _____ | Accelerated Filer _____    
|----------------------------- | ---------------------------
|Non-Accelerated Filer _____   | Smaller reporting company X

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act) Yes [ ] No [X]

On October 29, 2008, 36,877,192 shares of the registrants
common stock were outstanding.

---

|NEW JERSEY MINING COMPANY    
|-----------------------------
|QUARTERLY REPORT ON FORM 10-Q
|FOR THE QUARTERLY PERIOD     
|ENDED SEPTEMBER 30, 2008     
|                             
|                             
|TABLE OF CONTENTS            

|                                                                                                          | Page
|--------------------------------------------------------------------------------------------------------- | ----
|PART I  FINANCIAL
      INFORMATION                                                                      |     
|Item
      1: Financial Statements                                                                        | 3   
|Item
      2: Managements Discussion and Analysis of Financial Condition and Results
      of Operations | 8   
|Item
      3: Quantitative and Qualitative Disclosures about Market Risk                                  | 11  
|Item
      4: Controls and Procedures                                                                     | 11  
|Item
      4T: Controls and Procedures                                                                    | 12  
|PART II  OTHER INFORMATION                                                                               |     
|Item
      1: Legal Proceedings                                                                           | 12  
|Item
      2: Unregistered Sales of Equity Securities and Use of Proceeds                                 | 12  
|Item
      3: Defaults Upon Senior Securities                                                             | 12  
|Item
      4: Submission of Matters to a Vote of Security Holders                                         | 12  
|Item
      5: Other Information                                                                           | 12  
|Item
      6: Exhibits                                                                                    | 12  
|SIGNATURES                                                                                                | 13  
|CERTIFICATIONS                                                                                            |     

[The balance of this page has been intentionally left
blank.]

2

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PART I-FINANCIAL INFORMATION

Item 1: FINANCIAL STATEMENTS

|New Jersey Mining Company               
|----------------------------------------
|(A Development Stage Company)           
|Balance Sheets (Unaudited)              
|September 30, 2008 and December 31, 2007

|ASSETS                                                                |  
|--------------------------------------------------------------------- | -
|                                                                      |  
|                                                                      |  
|Current assets:                                                       |  
|Cash and cash equivalents                                             | $
|Investment in marketable
      equity security at market              |  
|(cost-$6,531)                                                         |  
|Interest receivable                                                   |  
|Miscellaneous receivable                                              |  
|Inventory                                                             |  
|Total current assets                                                  |  
|                                                                      |  
|Property, plant, and equipment, net of accumulated
      depreciation |  
|Mineral properties, net of accumulated
      amortization             |  
|Reclamation bonds                                                     |  
|Total assets                                                          | $
|                                                                      |  
|                                                                      |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                  |  
|                                                                      |  
|Current liabilities:                                                  |  
|Accounts payable                                                      | $
|Accrued payroll and related payroll expenses                          |  
|Obligations under capital
      lease-current portion                 |  
|Notes payable-current portion                                         |  
|Total current liabilities                                             |  
|                                                                      |  
|Accrued reclamation costs                                             |  
|Obligation under capital lease-non-current                            |  
|Notes payable-non-current                                             |  
|                                                                      |  
|Total liabilities                                                     |  
|                                                                      |  
|Stockholders equity:                                                 |  
|Preferred stock, no par value, 1,000,000
      shares                 |  
|authorized; no shares issued and outstanding                          |  
|Common stock no par value, 50,000,000 shares
      authorized;        |  
|September 30, 2008-36,873,442 and                                     |  
|December
      31, 2007-32,291,192                                    |  
|shares issued and outstanding                                         |  
|Deficit accumulated during the development
      stage                |  
|Accumulated other
      comprehensive income                          |  
|Unrealized
      gain in marketable equity security                   |  
|Total stockholders equity                                            |  
|                                                                      |  
|Total liabilities and stockholders equity                            | $

3

The accompanying notes are an integral part of the financial
statements.

---

|New Jersey Mining Company                                                    
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|Statements of Operations and Comprehensive Loss
      (Unaudited)            
|For the Three and Nine Month Periods Ended September
      30, 2008 and 2007,
|And from Inception (July 18, 1996) through September
      30, 2008          

|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   | From
    Inception |  
|------------------------------------------------ | - | ------------------ | - | - | ------------------ | - | - | ------------------------ | - | - | ----------- | - | - | ------------------ | -
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   | (July 18, 1996)    |  
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   | Through            |  
|                                                 |   | September 30, 2008 |   |   | September 30, 2007 |   |   | September 30,
      2008 |  
|                                                 |   | Three Months       |   |   | Nine Months        |   |   | Three Months             |   |   | Nine Months |   |   |                    |  
|Income earned during the development stage:      |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Sales of gold                                    | $ |                    |   | $ | 50,559             |   | $ |                          |   | $ | 43,250      |   | $ | 149,715            |  
|Sales of
      concentrate                       |   |                    |   |   |                    |   |   |                          |   |   | 50,507      |   |   | 601,168            |  
|                                                 |   |                    |   |   | 50,559             |   |   |                          |   |   | 93,757      |   |   | 750,883            |  
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Cost and expenses:                               |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Direct
      production costs                    |   | 15,304             |   |   | 117,443            |   |   | 24,683                   |   |   | 223,979     |   |   | 882,817            |  
|Management                                       |   | 73,683             |   |   | 207,882            |   |   | 67,174                   |   |   | 198,372     |   |   | 1,183,197          |  
|Exploration                                      |   | 204,909            |   |   | 492,643            |   |   | 146,257                  |   |   | 371,196     |   |   | 2,091,368          |  
|Gain on sale of mineral property                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   | (90,000            | )
|Gain on default
      of mineral                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|property sale (Note 6)                           |   | (270,000           | ) |   | (270,000           | ) |   |                          |   |   |             |   |   | (270,000           | )
|Depreciation and
      amortization              |   | 49,766             |   |   | 154,926            |   |   | 49,424                   |   |   | 105,720     |   |   | 495,270            |  
|General and administrative
      expenses        |   | 158,218            |   |   | 404,340            |   |   | 111,413                  |   |   | 305,960     |   |   | 2,013,300          |  
|Total operating expenses                         |   | 231,880            |   |   | 1,107,234          |   |   | 398,951                  |   |   | 1,205,227   |   |   | 6,305,952          |  
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Other (income) expense:                          |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Timber sales                                     |   |                    |   |   |                    |   |   |                          |   |   | (487        | ) |   | (54,699            | )
|Timber expense                                   |   |                    |   |   |                    |   |   |                          |   |   |             |   |   | 14,554             |  
|Royalties and
      other income                 |   | (156               | ) |   | (1,500             | ) |   |                          |   |   | (1,501      | ) |   | (71,703            | )
|Royalty expense                                  |   | 500                |   |   | 1,156              |   |   | 500                      |   |   | 6,203       |   |   | 34,773             |  
|Gain on sale of
      marketable equity security |   |                    |   |   |                    |   |   | (37,598                  | ) |   | (37,598     | ) |   | (70,109            | )
|Interest income                                  |   | (4,526             | ) |   | (13,971            | ) |   | (5,437                   | ) |   | (22,288     | ) |   | (45,042            | )
|Interest expense                                 |   |                    |   |   | 3,251              |   |   | 9,214                    |   |   | 16,754      |   |   | 60,250             |  
|Write-off of goodwill                            |   |                    |   |   |                    |   |   |                          |   |   |             |   |   | 30,950             |  
|Write-off of
      investment                    |   |                    |   |   |                    |   |   |                          |   |   |             |   |   | 90,000             |  
|Total other (income) expense                     |   | (4,182             | ) |   | (11,064            | ) |   | (33,321                  | ) |   | (38,917     | ) |   | (11,026            | )
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Net loss                                         |   | 227,698            |   |   | 1,045,611          |   |   | 365,630                  |   |   | 1,072,553   |   |   | 5,544,043          |  
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Other comprehensive income:                      |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Unrealized
      (gain) loss on marketable       |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|equity security                                  |   | 40,820             |   |   | 334,724            |   |   | 555,553                  |   |   | 480,553     |   |   | (50,617            | )
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Comprehensive loss                               | $ | 268,518            |   | $ | 1,380,335          |   | $ | 921,183                  |   | $ | 1,553,106   |   | $ | 5,493,426          |  
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Net loss per common share-basic                  | $ | 0.01               |   | $ | 0.03               |   | $ | 0.01                     |   | $ | 0.04        |   | $ | 0.30               |  
|                                                 |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|Weighted average common shares                   |   |                    |   |   |                    |   |   |                          |   |   |             |   |   |                    |  
|outstanding-basic                                |   | 36,845,266         |   |   | 35,503,762         |   |   | 30,815,001               |   |   | 30,349,480  |   |   | 18,405,949         |  

4

The accompanying notes are an integral part of these
financial statements.

---

|New Jersey Mining Company                                          
|-------------------------------------------------------------------
|(A Development Stage Company)                                      
|Statements of Cash Flows (Unaudited)                               
|For the Nine Month Periods Ended September 30, 2008
      and 2007,
|And from Inception (July 18, 1996) through September
      30, 2008

|                                                               |   |               |   |   |                 |   |   | From Inception     |  
|-------------------------------------------------------------- | - | ------------- | - | - | --------------- | - | - | ------------------ | -
|                                                               |   | September 30, |   |   | (July 18, 1996) |  
|                                                               |   |               |   |   |                 |   |   | through            |  
|                                                               |   | 2008          |   |   | 2007            |   |   | September 30, 2008 |  
|Cash flows from operating activities:                          |   |               |   |   |                 |   |   |                    |  
|Net loss                                                       | $ | (1,045,611    |   | $ | (1,072,553      | ) | $ | (5,544,043         | )
|Adjustments to
      reconcile net loss to net cash            |   |               |   |   |                 |   |   |                    |  
|used by
      operating activities:                            |   |               |   |   |                 |   |   |                    |  
|Depreciation and amortization                                  |   | 154,926       |   |   | 105,720         |   |   | 495,269            |  
|Write-off
      of equipment                                   |   |               |   |   |                 |   |   | 11,272             |  
|Write-off of goodwill and investment                           |   |               |   |   |                 |   |   | 120,950            |  
|Gain on
      sale of mineral property                         |   |               |   |   |                 |   |   | (90,000            | )
|Gain on default of mineral property sale                       |   | (270,000      | ) |   |                 |   |   | (270,000           | )
|Gain on
      sale of marketable equity securities             |   |               |   |   | (37,598         | ) |   | (70,109            | )
|Common stock issued
      for:                                 |   |               |   |   |                 |   |   |                    |  
|Management
      and directors fees                           |   | 58,050        |   |   | 62,250          |   |   | 725,087            |  
|Services and other                                             |   | 25,500        |   |   | 16,700          |   |   | 186,811            |  
|Exploration                                                    |   | 14,540        |   |   | 22,560          |   |   | 83,421             |  
|Mineral property agreement                                     |   |               |   |   |                 |   |   | 15,000             |  
|Change in:                                                     |   |               |   |   |                 |   |   |                    |  
|Inventories                                                    |   | (1,779        | ) |   | 95,610          |   |   | (91,296            | )
|Accounts
      receivable                                      |   | (5,730        | ) |   | 13,628          |   |   | (5,730             | )
|Interest receivable                                            |   | 469           |   |   | (2,826          | ) |   | (808               | )
|Other
      assets                                             |   |               |   |   |                 |   |   | (778               | )
|Accounts payable                                               |   | 16,851        |   |   | (49,694         | ) |   | 89,631             |  
|Accrued
      payroll and related payroll expense              |   | 19,909        |   |   | 10,755          |   |   | 57,639             |  
|Accrued reclamation costs                                      |   |               |   |   |                 |   |   | 19,800             |  
|Net cash used by operating activities                          |   | (1,032,875    | ) |   | (835,448        | ) |   | (4,267,884         | )
|Cash flows from investing activities:                          |   |               |   |   |                 |   |   |                    |  
|Purchases of property, plant, and
      equipment              |   | (100,991      | ) |   | (184,147        | ) |   | (1,078,923         | )
|Purchase of mineral
      property                             |   |               |   |   |                 |   |   | (14,904            | )
|Proceeds from sale of mineral property                         |   |               |   |   |                 |   |   | 120,000            |  
|Deposit received on
      sale of mineral property (Note 6)    |   | 270,000       |   |   |                 |   |   | 270,000            |  
|Purchase of reclamation bonds                                  |   | (286          | ) |   | (121,176        | ) |   | (126,359           | )
|Purchase of
      certificates of deposits                     |   |               |   |   |                 |   |   | (200,000           | )
|Proceeds from sales of certificates of
      deposits          |   |               |   |   | 200,000         |   |   | 200,000            |  
|Purchase of marketable
      equity security                   |   |               |   |   |                 |   |   | (7,500             | )
|Proceeds from sales of marketable
      equity securities      |   |               |   |   | 38,095          |   |   | 71,078             |  
|Cash of acquired
      companies                               |   |               |   |   |                 |   |   | 38,269             |  
|Deferral of development costs                                  |   | (249,291      | ) |   | (126,341        | ) |   | (665,393           | )
|Net cash used by investing
      activities                    |   | (80,568       | ) |   | (193,569        | ) |   | (1,393,732         | )
|Cash flows from financing activities:                          |   |               |   |   |                 |   |   |                    |  
|Exercise of stock
      purchase warrants                      |   | 1,740,000     |   |   | 120,000         |   |   | 2,537,600          |  
|Sales of common stock, net of issuance
      costs             |   | 950           |   |   | 1,278,319       |   |   | 4,226,576          |  
|Principal payments on
      capital lease                      |   | (28,325       | ) |   | (26,206         | ) |   | (148,217           | )
|Principal payments on notes payable                            |   | (88,000       | ) |   | (31,115         | ) |   | (171,688           | )
|Net cash provided by financing
      activities                |   | 1,624,625     |   |   | 1,340,998       |   |   | 6,444,271          |  
|Net change in cash and cash equivalents                        |   | 511,182       |   |   | 311,981         |   |   | 782,655            |  
|Cash and cash equivalents, beginning of
      period           |   | 271,473       |   |   | 76,821          |   |   | 0                  |  
|Cash and cash equivalents, end of period                       | $ | 782,655       |   | $ | 388,802         |   | $ | 782,655            |  
|Supplemental disclosure of cash flow
      information         |   |               |   |   |                 |   |   |                    |  
|Interest paid in cash                                          | $ | 25,433        |   | $ | 16,754          |   | $ | 73,068             |  
|Non-cash investing and financing
      activities:             |   |               |   |   |                 |   |   |                    |  
|Common stock issued for:                                       |   |               |   |   |                 |   |   |                    |  
|Property, plant, and equipment                                 | $ | 5,600         |   | $ | 7,000           |   | $ | 50,365             |  
|Mineral
      properties                                       |   |               |   |   |                 |   | $ | 294,300            |  
|Payment of accounts payable                                    |   |               |   | $ | 12,205          |   | $ | 12,205             |  
|Acquisitions of companies, excluding cash                      |   |               |   |   |                 |   | $ | 743,653            |  
|Capital lease
      obligation incurred for equipment acquired |   |               |   |   |                 |   | $ | 178,588            |  
|Notes payable for property and
      equipment acquired        |   |               |   | $ | 401,112         |   | $ | 446,399            |  

5

The accompanying notes are an integral part of these
financial statements.

---

|New Jersey Mining Company    
|-----------------------------
|Notes to Financial Statements
|(Unaudited)                  

|1. | Basis of Presentation:
|-- | ----------------------

These unaudited interim financial statements have been prepared
by New Jersey Mining Company (the Company) in accordance with accounting
principles generally accepted in the United States of America for interim
financial information, as well as the instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of the Companys management, all adjustments (consisting of only normal
recurring accruals) considered necessary for a fair presentation of the interim
financial statements have been included.

The preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities known
to exist as of the date the financial statements are published, and the reported
amounts of revenues and expenses during the reporting period. Uncertainties with
respect to such estimates and assumptions are inherent in the preparation of the
Company's financial statements; accordingly, it is possible that the actual
results could differ from these estimates and assumptions, which could have a
material effect on the reported amounts of the Company's financial position and
results of operations. Operating results for the nine month period ended
September 30, 2008, are not necessarily indicative of the results that may be
expected for the full year ending December 31, 2008.

For further information refer to the financial statements and
footnotes thereto in the Companys Annual Report on Form 10-KSB for the year
ended December 31, 2007.

The Company presents its financial statements in accordance
with Statement of Financial Accounting Standards (SFAS) No. 7, Accounting for
Development Stage Entities, as management believes that while the Companys
planned principal operations have commenced, the revenue generated from them is
not sufficient to cover all corporate costs. Additional development of the
Companys properties is necessary before a transition is made to reporting as a
production stage company.

|2. | Description of Business
|-- | -----------------------

The Company is an exploration stage company incorporated as an
Idaho corporation on July 18, 1996. The Company's primary business is exploring
for and developing gold, silver, and base metal mining resources in Idaho.

|3. | Equity
|-- | ------

Exercise of Stock Purchase WarrantsFor the
nine month period ended September 30, 2008 the Company issued 4,350,000 shares
of unregistered common stock, pursuant to the exercise of common stock purchase
warrants. The warrants were exercised at $0.40 per share for net proceeds of
$1,740,000.

Common Stock Issued for Cash, Goods, and
ServicesThe Company issued 48,800 and 130,500 shares respectively of
unregistered common stock to President Fred W. Brackebusch for management
services rendered in the three and nine month periods ending September 30, 2008.
The shares were valued at prices ranging from of $0.40 to $0.50 per share.

During the three and nine month periods ended September 30,
2008 the company issued 23,750 and 69,150 shares of unregistered common stock to
individuals for goods, services, cash, and service awards at fair value prices
ranging from $0.40 to $0.60 per share.

During the nine month period ended September 30, 2008 the
company issued 32,600 shares of unregistered common stock to individuals for
exploration. The shares were valued at prices ranging from $0.40 to $0.60.

6

---

|4. | Fair Value Measurement
|-- | ----------------------

Effective January 1, 2008, we adopted the provisions of SFAS
No. 157, Fair Value Measurements, for our financial assets and financial
liabilities without a material effect on our results of operations or financial
position. The effective date of SFAS No. 157 for non-financial assets and
non-financial liabilities has been deferred by FSP 157-2 to fiscal years
beginning after November 15, 2008, and we do not anticipate the impact of
adopting SFAS 157 for non-financial and non-financial liabilities to have a
material impact on our results of operations or financial position.

SFAS No. 157 expands disclosure requirements to include the
fair value measurement, and its fair value hierarchy level, for each major
category of assets and liabilities that are measured at fair value.

Hierarchy level is determined by segregating fair value
measurements using quoted prices in active markets for identical assets or
liabilities (Level 1), significant other observable inputs (Level 2), and
significant unobservable inputs (Level 3).

The table below sets forth our financial asset that was
accounted for at fair value at September 30, 2008, and its respective hierarchy
level. We had no other financial assets or liabilities accounted for at fair
value at September 30, 2008.

Balance at
    
    
    HierarchySeptember 30,
    
    
    Level2008Investments in marketable 
          equity
      securities
    
    57,148
    
    
    Level 1


We also adopted the provisions of SFAS No. 159, The Fair Value
Option for Financial Liabilities, effective January 1, 2008. SFAS No. 159
permits entities to choose to measure many financial assets and financial
liabilities at fair value. The adoption of SFAS No. 159 has not had a material
effect on our financial position or results of operations as of and for the
three and nine month periods ended September 30, 2008.

|5. | New Accounting Pronouncement
|-- | ----------------------------

In March 2008, the Financial Accounting Standards Board
(FASB) issued SFAS No. 161, "Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133 (SFAS No. 161), to
provide an understanding of how and why an entity uses derivative instruments,
how they are accounted for, and how they affect an entity's financial
statements. SFAS No. 161 is effective for both interim and annual reporting
periods beginning after November 15, 2008. We do not expect any material effect
to our financial statements from the enactment of SFAS No. 161.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles, which identifies the sources of
accounting principles and provides entities with a framework for selecting the
principles used in preparation of financial statements that are presented in
conformity with GAAP. The adoption of SFAS No. 162 is not expected to have a
material impact on our financial statements.

|6. | Mining Venture Agreements
|-- | -------------------------

Silver Star Venture AgreementThe Company and
Silverstar Mining Corp. ("Silverstar") entered into a Mining Venture Agreement
on April 1, 2008, relating to the Silver Strand Property. During the three
months ended June 30, 2008, Silverstar paid the Company $270,000 of $500,000 to
acquire a 50% mining rights and property interest in the Silver Strand property.
On July 31, 2008 Silverstar defaulted on the terms of the agreement by not
making the final payment when due on July 31, 2008. The Company is not requred
to refund the initial $270,000 deposit and has recognized it as income from
operations in the third quarter of 2008.

7

---

Newmont Venture AgreementThe Company entered
into a venture agreement with Newmont North America Exploration Limited
("Newmont") in March 2008, relating to exploration of the Company's Toboggan
Project. Newmont is conducting exploration in a 38 square mile area centered on
the prospects that the Company has staked in the past two years. To earn a
participating interest in the Venture, Newmont is required to contribute
$2,000,000 in exploration expenditures as follows: $300,000 on or before March
2009, an additional $700,000 by March 2010, and an additional $1,000,000 by
March 2011.

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

When we use the terms "New Jersey Mining Company," the
"Company," "we," "us," or "our," we are referring to New Jersey Mining Company
(the "Company") and its subsidiaries, unless the context otherwise requires.

Cautionary Statement about Forward-Looking
StatementsThis Quarterly Report on Form 10-Q includes certain statements
that may be deemed to be "forward-looking statements." All statements, other
than statements of historical facts, included in this Form 10-Q that address
activities, events or developments that our management expects, believes or
anticipates will or may occur in the future are forward-looking statements. Such
forward-looking statements include discussion of such matters as:

- The amount and nature of future capital, development and exploration
  expenditures;
- The timing of exploration activities; and
- Business strategies and development of our business plan.

Forward-looking statements also typically include words such as
"anticipate," "estimate," "expect," "potential," "could" or similar words
suggesting future outcomes. These statements are based on certain assumptions
and analyses made by us in light of our experience and our perception of
historical trends, current conditions, expected future developments and other
factors we believe are appropriate in the circumstances. Such statements are
subject to a number of assumptions, risks and uncertainties, including such
factors as the volatility and level of metal prices, currency exchange rate
fluctuations, uncertainties in cash flow, expected acquisition benefits,
exploration mining and operating risks, competition, litigation, environmental
matters, the potential impact of government regulations, and other matters
related to the mining industry, many of which are beyond our control. Readers
are cautioned that forward-looking statements are not guarantees of future
performance and that actual results or developments may differ materially from
those expressed or implied in the forward-looking statements.

The Company is under no duty to update any of these
forward-looking statements after the date of this report. You should not place
undue reliance on these forward-looking statements.

Plan of OperationThe Company is executing its
strategy to conduct exploration for gold, silver and base metal deposits in the
greater Coeur dAlene Mining District of northern Idaho while concurrently
conducting mining and mineral processing operations on higher grade ore reserves
it has located on its exploration properties. The financial strategy is to
generate cash from these operations to pay for corporate expenses and to provide
additional funds for exploration, thus reducing the need to raise funds through
financing activities including sale of common stock. The strategy includes
finding and developing ore reserves in order to increase production of gold,
silver, and base metals. In addition, the sale or joint venture of mineral
properties is used as a source of funds and to reduce exploration costs.

The Company has several properties at which most exploration is
being conducted; the Toboggan Project, the Niagara, the Golden Chest, the Silver
Strand, the Coleman, and the Giant Ledge. The Toboggan Project is a group of
prospects in the Murray, Idaho District that appear to be related to alkaline
magmatism and contain gold and silver telluride minerals. In the first quarter
of 2008 a joint venture agreement was signed with Newmont North

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America Exploration Limited relating to exploration of the
Toboggan Project. Newmont is conducting exploration in a 38 square mile area
centered on the prospects that the Company has staked in the past two years. The
Niagara copper-silver deposit, also located in the Murray, Idaho area, in the
Revett formation was drilled in the 1970s, but more drilling is needed to
increase the confidence in resource estimates and to evaluate whether gold is a
significant component of the deposit. Results of the first two drillholes were
received in the third quarter confirming the continuity of the resource and
indicating that gold would be a significant byproduct. The Company is continuing
in-fill drilling on the known resource and is planning to drill to intercept a
deeper stratabound target in the Revett formation. At the Golden Chest mine,
production is not being done while a ramp is being driven to access a block of
reserves discovered by drilling from the surface. Near the end of the third
quarter the ramp intersected the #3 level of the old workings thus increasing
access to potential drilling targets and providing quicker potential for
secondary and haulage access. A new vein, called the Clagett vein, containing
gold and tungsten mineralization was encountered in the ramp during the third
quarter. Permits are in place and development of infrastructure has been
completed in order to be able to begin production of silver-gold ore at the
Silver Strand mine in May 2009. At the Coleman underground mine, a drift was
completed to the vicinity of a drill intercept which indicates the presence of
higher grade gold-silver mineralization. Further work at the Coleman will not be
done until drilling is conducted to locate the higher grade vein. The Giant
Ledge is a new prospect which was staked in the second quarter. Geophysical and
geological studies were conducted in the third quarter. Gold, lead and copper
mineralization is related to an intrusive stock.

The Company continued to conduct core drilling operations in
the third quarter of 2008 with its own core drilling machine. In the third
quarter, drilling operations were concentrated at the Niagara deposit with two
intercepts completed in the known resource and two more drillholes explored a
target in the hangingwall of the Murray Peak fault just west of the Niagara
resource. The Niagara resource intercepts were of similar metal content as the
historic drilling with the notable exception that economically significant gold
grades were sampled in the main resource zone. In the remainder of 2008,
drilling will continue in the Murray area.

At the Toboggan Project where gold-silver telluride mineral
systems have been located, Newmont continued exploration in the third quarter.
Work being done by Newmont includes soil and stream sediment sampling, claim
staking, geological reconnaissance, and geophysical surveys.

At the Silver Strand mine, a new adit started in 2007 was
completed in the third quarter of 2008 which provides access to the proven and
probably reserves. Work was suspended until the start of the 2009 season in
order to concentrate on completing access to the reserves at the Golden Chest
mine.

The New Jersey mineral processing plant was idle except for
test runs during the third quarter but operations resumed recently to process
development material from a new vein encountered in the Golden Chest ramp.
During the third quarter improvements to the ore feeder, electrowinning power
and concentrate dewatering were completed. The plant will be operating part time
until a steady feed from the Golden Chest mine is available, possibly in the
first quarter of 2009.

Changes in Financial ConditionThe Company
maintains an adequate cash balance by increasing or decreasing its exploration
expenditures as limited by availability of cash from operations or from
financing activities. The cash balance at the end of the third quarter of 2008
was $782,655, and Figure 1 shows the corresponding balances for previous
accounting periods.

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The cash balance decreased during the third quarter of 2008 due
to exploration and development expenditures, lack of sales and financing
activities. Investment in a marketable equity security held by the Company
decreased from $97,968 to $57,148 during the quarter due to decline in the stock
price of that security.

Results of OperationsIncome Earned during the
Development Stage (Revenue) for the third quarter 2008 was $0, the same as the
third quarter of 2007. Figure 2 shows a net loss for the third quarter of 2008
of $227,698 compared to the net loss for the third quarter of 2007 of $365,630
and the net losses in previous accounting periods



Gold production was only 20 ounces in the third quarter of 2008
as compared to 24 ounces for the respective 2007 period. Gold production is
expected to increase slightly in the fourth quarter.

Ore mining operations at the Golden Chest mine are expected to
be minimal for the remainder of 2008 while access is being extended to the Idaho
vein reserves. Once the Idaho vein ramp development is completed there will be
enough reserves for many years of mining at the rate of 4,000 tonnes/year.

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Ore production is scheduled at the Silver Strand mine in the
second quarter of 2009. A decision was made in the third quarter to send mining
crews and equipment to the Golden Chest mine to speed up that development, thus
delaying any production from the Silver Strand until 2009. Production could
commence in 30 days after mobilization in 2009. Operating results at the Silver
Strand mine will depend upon the price of silver as well as gold. Present silver
and gold prices are sufficient in managements estimation to generate a gross
profit at the Silver Strand mine based on the operating plan which was part of
the permitting process.

No capital expenditures are planned at the New Jersey mineral
processing plant.

The amount of money to be spent on exploration at the Companys
mines and prospects will depend upon the amount of gross profit generated by
operations and the amount of money raised by financing activities. Basically,
management expects to be able to continue the present operating scenario with
its three active mines and mineral processing plant indefinitely, but expanded
exploration or production activities depend upon the results of financing
activities.

Changes in Direct Production CostsDirect
production costs decreased for the three and nine month periods ending September
30, 2008 compared to the comparable periods last year. The decrease was
primarily due to decision to limit production because the Company is developing
a ramp to access ore reserves at the Golden Chest mine.

Changes in Exploration CostsExploration
expenses increased for the three and nine month periods ending September 30,
2008 compared to the comparable periods last year. The increase was due to
increased exploration drilling and geological activities.

Changes in General and Administrative
CostsGeneral and administrative cost increased for the three and
nine month periods ending September 30, 2008 compared to the comparable periods
last year. The Company increased the number of its employees, wages were
increased, and accounting costs increased.

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Not required for small reporting companies.

Item 4: CONTROLS AND PROCEDURES

Disclosure Controls and ProceduresThe
Companys President and Chief Executive Officer who also serves as the Companys
principal financial officer, has evaluated the effectiveness of the Companys
disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934 (the Exchange Act), as of the
end of the period covered by this report. Based on such evaluation, the
Companys President, Chief Executive Officer, and principal financial officer
has concluded that, as of the end of such period, the Companys disclosure
controls and procedures are effective in recording, processing, summarizing, and
reporting, on a timely basis, information required to be disclosed by the
Company in the reports that it files under the Exchange Act

Changes in internal control over financial
reporting.The President, Chief Executive Officer, and principal
financial officer conducted evaluations of the Companys internal controls over
financial reporting to determine whether any changes occurred during the quarter
ended September 30, 2008 that have materially affected, or are reasonably likely
to materially affect, the Companys internal control over financial reporting.
No material changes in internal control over financial reporting occurred in the
quarter ended September 30, 2008.

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Item 4T. CONTROLS AND PROCEDURES

Information regarding internal control over financial reporting
has been set forth in Item 4.

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

None

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

Neither the constituent instruments defining the rights of the
Companys securities filers nor the rights evidenced by the Companys
outstanding common stock have been modified, limited or qualified.

The Company issued 48,800 shares of unregistered common stock
to President Fred W. Brackebusch for management services rendered on September
30, 2008. The shares were valued at a price of $0.40 per share. In managements
opinion, the securities were issued pursuant to exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.

During the third quarter the Company issued 3,750 shares of
unregistered common stock at an average price of $0.46 to other accredited and
sophisticated individuals for goods and services, and 20,000 shares at an
average price of $0.40 to certain hourly employees for service awards during the
year. In managements opinion, the securities were issued pursuant to exemptions
from registration under Section 4(2) of the Securities Act of 1933, as
amended.

Item 3. DEFAULTS UPON SENIOR SECURITIES

The Company has no outstanding senior securities.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS

None

Item 5. OTHER INFORMATION

None

Item 6. EXHIBITS

|Number | Description                                                                                                                                                                                   
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1    | Articles of Incorporation.
        Filed as an exhibit to the registrant's registration statement on Form
        10- SB (Commission File No. 000-28837) and incorporated by reference herein.
|3.2    | Bylaws. Filed as an exhibit to
        the registrant's registration statement on Form 10-SB (Commission File
        No. 000-28837) and incorporated by reference herein.                    
|31.1   | Certification
        pursuant to Section 302 of the Sarbanes-Oxley act of 2002.                                                                                                              
|32.1   | Certification
        pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.                                                           

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SIGNATURES

Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.

| | NEW JERSEY MINING COMPANY
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| | By:                      
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| |                          
| | By:                      
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| |                          

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